The Great Budget Chase.

Since The Drift is primarily aimed at the sell side of our industry, I tend not to get very many comments from ad agency execs. But I’m hoping what I write today will ring true with agency leaders and that a few of them might take the time to respond. If you feel so moved, perhaps you’ll forward this to someone who runs an agency or a major account to see what they think.

The subject today is budgets. Most of the sellers and sales organizations I work with are in constant pursuit of the digital ad (or mobile or video or DR) budget. Media planners are constantly saying “we haven’t gotten the budget from the client yet.” After a short silence, we hear that the elusive budget has arrived, but is far smaller than anticipated and has already been allocated. The seller then balls up his fists and curses either the fates or the duplicity of the agency. But I think both the approach and the reaction are ill-considered and cheap.

This week’s Drift is proudly underwritten byBionic Advertising Systems, an advertising technology company focused on delivering innovative software that streamlines and automates media workflow for marketers, their advertising agencies, and publishers.
Instead, let’s look at it from the agency’s perspective. Relatively few sellers put in much time and effort before the budget is set and the planning process is in full swing. A few of us will “check in” from time to time: Any budget yet? No? OK, I’ll check back later. Others will quiz each other at events or on Seller Crowd with questions like Does anybody know if a budget’s been set on the AT&T Wireless business yet? As soon as a budget does materialize, sellers begin to swarm like so many five-year-old soccer players around the ball. Now that you have the money and are as busy as you’re going to be all year, how about seeing me and hearing my story?

For every thousand sales people who show up to help an agency spend an existing budget, only one or two ever talk about helping the agency grow budgets or tap into new ones.

The dirty secret is that many media agencies operate on razor thin margins. The way they get healthy is by getting existing clients to spend more with them than initially planned. Sellers are in a great position to help them if we just step out of the box and start to think creatively about all the budgets and pools of funding that are in play today. Shopper Marketing. Promotion. Retail Co-Op. Compliance. Research. Public Relations. Branded Entertainment. Social. Video. Mobile. There’s a guerilla war going on among agencies, consulting firms and other service providers who are constantly raiding one another to steal away budgets through creativity and guile.

If you want to change the way you’re seen by a key agency, reach out to a senior executive and tell her that you’ve got an idea that you think may drive additional spending by one of her clients. Also tell her that your organization is prepared to run the program or capability so that the agency doesn’t have to put any real staff time against it.

Now you sound like someone worth meeting. Now you sound like profit.

Interested in the immediate future of digital video? The nextUpstream Seller Forumis happening on Tuesday June 24th in New York. If you’re a CRO, EVP, SVP or VP of sales and sell to agencies and clients,let us know you’re interestedand we’ll tell you more.

3 comments

Doug this is an fantastic approach. I feel as sellers we are more reactive than proactive and even though we have the client’s best intention’s in mind it is very difficult to build something worthwhile and innovative once budgets have already been set/ allocated. Our organization is a firm believer in bringing first-to-market ideas to our clients that will help them gain valuable insight and learnings that will benefit the entire digital community.

Looking forward to more additional and valued advice in the coming weeks.

I’m many years out from my roles at big agencies but some fundamentals don’t change too much.

This manner of talking to sales people about the budget in the ways that Doug describes goes back much further than the birth of digital.

First of all, go back to Doug Weaver’s most fundamental advice. If the conversation Doug describes in this edition of The Drift rings true, then you are not calling on a true STAKEHOLDER with authority to make decisions. Buyers who don’t have budget information, then find out the budget is smaller than expected and then spend money very close to the date when the campaign is running are only one inch closer to what is really going on than is the sales person. Move UPSTREAM. Doug didn’t name his company for nothing!

My observation is that agency executives who are responsible of only one channel of the media budget (TV buying, print buying, outdoor, radio, digital etc.) are not in a position to set the budget. They are paid to manage the budget they are given as negotiators and executors. Search for the generalist media planner (not the digital media planner) – you are looking for the most senior executive on the agency side that is accountable to the client for the TOTAL media budget. This person is responsible for rationalizing the size of the budget and the allocation across channels. This person has a CLIENT facing job and does not allocate a lot of their time to meetings with sales people. BUT, if you can empower this high level media executive with insights and ideas that make them better leaders when it comes to digital tactics, they are likely to embrace the meeting and keep an open dialog with you. Their information about budgets is much better than the buyers information. They know how to move money into digital quickly if they have a great reason to do so. They know that the budget is fluid whereas buyers believe the budget is fixed. You can’t CLOSE the sale with these senior executives but you can create momentum for great ideas.

Preparing for a call with the top agency-side media executive who owns overall responsibility is a lot like preparing for a meeting with a Brand manager or CMO person on the client side. Earn their trust, make them smarter and don’t oversell – that’s going to get you out in front of the RFP process.

[…] In this week’s Drift column, Doug Weaver drills down into the budget-setting process between sellers and agencies. “For every thousand salespeople who show up to help an agency spend an existing budget,” he writes, “only one or two ever talk about helping the agency grow budgets or tap into new ones.” If ad sellers push harder for increased spend from established clients before budgets are actually set, they may just change how key agencies perceive them. More from the seller swami. […]